Investors to Expand Tanzania Mufindi Paper Mills

March 17, 2011

According to recent reports, the privatized Tanzania Mufindi Paper Mills Limited (MPM) located in the Iringa Region is anticipating investments of more than TZS 265 billion over the next seven years from investors who are aiming to expand the mill in an effort to increase the overall production capacity.

In order to meet the growing demands in the East African region, the current expansion plan, which will be executed in two phases, will aim to increase the mill’s capacity to 150,000 tons per year.

In a recent interview with the Guardian Tanzania, Yerra Choudary, General Manager for MPM, said that the financial deterrents for the investment are currently nearing resolution and the execution of the plan is scheduled to begin later this year in October, with the first phase reaching completion by March 2013 and second phase in March 2017.

Upon completion of both phases, it is expected that the Mufindi Paper Mills will contribute approximately USD 90 million to the country’s annual foreign exchange earnings.

According to Mr. Choudary, this investment is expected to greatly increase paper exports, thereby also increasing the firm’s productivity, efficiency and effectiveness.

The East African Common Market currently uses approximately 600,000 tons of paper per year, with nearly 80 percent of the demand being met from imports outside of the region.

According to the MPM Assistant Manager of Finishing, Warehouse and Shipping, Steven Chove, this demand is growing annually by approximately 6 percent and will reach an estimated one million tons by the year 2020.

Mr. Chove went on to warn that the regional market will spend nearly USD 800 million in foreign exchange if investments are not made in the pulp and paper sector, thereby significantly impacting the regions position on the balance of payments.

“Tanzania more than the rest of the countries, has abundant surplus land for raising sustainable pulpwood plantations to meet the growing demand for pulp and paper in the region,” he said, “While the pulp and paper sector is highly capital intensive, substantial new investments in the sector can be realized if MPM is turned into a success story.”

Already, the Tanzania paper firm has set in motion an ambitious plantation initiative to raise sustainable pulpwood and energy plantations in an effort to power the firm’s plan for long term growth.

According to the Deputy General Manager of MPM, Mallampati Kumar, his firm has currently established plantations on 5,000 of the 20,000 hectares of land that it owns and is in the process of looking for additional areas.